Cullen/Frost Bankers Inc. Chairman and CEO Phillip Green said Jan. 25 the company has seen greater optimism from customers since the U.S. election in November and expects that to translate into improved loan growth in 2017.

Green said on a conference call to discuss fourth-quarter 2016 results that the company's average loan balances in the period grew 3.1% from a year earlier. When excluding energy loans, he said average loans grew 8.2% in the fourth quarter from the year-ago period.

Green sees positive momentum moving forward, noting that 2016 was the company's strongest year for new loan commitments, which increased 7% from the prior year. He said customer activity levels have improved since the U.S. election in November. After receiving clarity on the political situation, Green said many "mid and small" customers are now moving forward with plans they had delayed.

"I think we're definitely seeing just general optimism in the market moving forward," Green said on the call. "I think we're seeing momentum increase. I would expect loan growth to be better than 2016 for sure."

While Cullen/Frost said loan demand has increased, the company noted that it has not seen an increase in deposit costs, even with the recent rate increase by the Federal Reserve in December. Cullen/Frost CFO Jerry Salinas said the company expects deposit costs will increase in 2017. He noted, however, that the company does not expect to lose deposits over pricing issues because it tends to price the funds in line with other large banks.

"We've seen that rates are good to go up, deposit rates are going to go up. But we'll be providing a fair market price when we compare ourselves to the big banks in our pricing philosophy," Salinas said.